THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[18:00:00]

WOLF BLITZER, CNN ANCHOR: A historic Democratic upset in crimson red Alabama is sending shockwaves through the White House and the Republican Party. After backing the losing candidate, is the president trying to rewrite history tonight?

And proxy war. The Trump administration is making a new move connected to a bloody conflict in which a U.S. ally and a dangerous adversary are taking sides. Stand by for CNN's exclusive reporting on the ground of this long and horrific war.

We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You're in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

BLITZER: Breaking tonight: President Trump says the GOP-controlled Congress is just days away from passing tax reform, and that could mean savings for Americans as soon as February.

Republican House and Senate negotiators striking a tentative deal today on a compromised version of their competing tax bills. Mr. Trump seeking a quick vote and a needed victory just hours after the stunning upset in Alabama that will cost the GOP a crucial vote in the Senate.

Also breaking, Democrat Doug Jones says President Trump phoned him after his historic Senate win and invited him to the White House. Jones describes the call as gracious. But, privately, a source tells CNN that the Alabama results were devastating for the president.

After endorsing the scandal-tainted Republican Roy Moore, Mr. Trump is trying to claim in a new tweet that he was right about the race all along because he didn't back Moore in the primary.

And the deputy attorney general in the hot seat, defending the special counsel he appointed, as Republican lawmakers accuse Robert Mueller's team of political bias. Rod Rosenstein telling a House panel he hasn't seen any cause to fire Mueller from the Russia investigation.

But Mueller's GOP critics have seized on newly disclosed anti-Trump texts sent and received by an FBI agent who was removed from Mueller's team for possible bias. This hour, I will talk about that and more with Senator Joe Manchin.

He's a Democrat on the Senate Intelligence Committee. And our correspondents and specialists are also standing by.

First, let's go to our CNN White House correspondent, Jim Acosta.

Jim, the president may be hoping that new progress towards tax cuts will help ease the pain of that loss in Alabama.

President Trump to change the subject today after his tax plan was unveiled here at the White House, but after Roy Moore's stunning defeat down in Alabama, even the president's own allies agree Mr. Trump is weakened.

One source close to the White House described Moore's loss as a -- quote -- "earthquake" that is devastating for the president. But that's hardly the only reality TV drama around the White House these days, especially in the last 24 hours.

(BEGIN VIDEOTAPE)

ACOSTA (voice-over): Trying to steer a wounded Republican Party back on message, President Trump touted the GOP's tax plan that appears to be on its way to final passage.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Our current tax code is burdensome, complex and profoundly unfair. If has exported our jobs, closed our factories and left millions of parents worried that their children might be the first generation to have less opportunity than the last.

ACOSTA: The GOP plan is expected to lower the corporate tax rate to 21 percent, trim the top rate for individuals to 37 percent, reduce the mortgage deduction for homeowners, and repeal the individual mandate in Obamacare, a holiday gift, the president claims, for taxpayers.

TRUMP: We want to give you, the American people, a giant tax cut for Christmas. And when I say giant, I mean giant.

ACOSTA: But the president are received an early lump of coal in his stocking in the form of the Alabama Senate race, where Democrat Doug Jones pulled off a major upset of Mr. Trump's endorsed candidate, Roy Moore.

It was a defeat for the president, who defied warning from fellow Republicans who rejected Moore, instead listening to his former chief strategist Steve Bannon.

TRUMP: A lot of Republicans feel differently. They're very happy with the way it turned out. But I would have -- as the leader of the party, I would have liked to have had the seat. I want to endorse the people that are running. ACOSTA: The president engaged in some revisionist history, tweeting:

"I said Roy Moore will not be able to win the general election. I was right. Roy worked hard, but the deck was stacked against him."

But that ignores the fact the president put his full weight behind Moore, who had been accused of child molestation.

TRUMP: He says it didn't happen. And you have to listen to him also.

ACOSTA: Even touting Moore's candidacy just cross the Alabama border in Florida.

TRUMP: This guy is screaming, "We want Roy Moore." He's right.

ACOSTA: Republicans who had clashed with the president were celebrating Moore's defeat.

SEN. BOB CORKER (R), TENNESSEE: I know we're supposed to cheer for our side of the aisle, if you will, but I'm really, really happy with what happened for all of us.

ACOSTA: While Democrats argue the Senate should wait for Jones to be seated before any vote on the GOP tax plan.

SEN. CORY BOOKER (D), NEW JERSEY: I think it's the right thing to do because the people of Alabama have spoken who they want to be representing them.

[18:05:00]

ACOSTA: Others in the GOP pointed fingers at Bannon, accusing the conservative firebrand of leading the party into disaster.

REP. PETER KING (R), NEW YORK: Not even so much as a political issue. Almost as a moral issue. This guy does not belong on the national stage. He looks like some disheveled drunk that wandered onto the political stage.

ACOSTA: Bannon's response to Moore's loss? No apologies.

STEVE BANNON, FORMER WHITE HOUSE CHIEF STRATEGIST: That's because Democrats hustled. And people have got to understand, you don't turn out, they're going to turn out. They did -- hat tipped to these guys at the DNC.

ACOSTA: But the election in Alabama wasn't the only source of turmoil for the White House, as top aide and former star of Mr. Trump's TV show "The Apprentice" Omarosa Manigault abruptly left her position, a reminder of the mountain of melodrama the president has brought to the West Wing that feels like a flashback.

(END VIDEOTAPE)

ACOSTA: Now, the White House confirms President Trump did call senator-elect Doug Jones down in Alabama. According to Jones, it was a -- quote -- "gracious call." But Republican sources close to the White House and up on Capitol Hill are still worried the president has not fully learned his lessons from Alabama. They're warning the president to stay away from Steve Bannon moving forward into the midterms next year. As one source told us, Wolf, the president has egg on his face because he listened to Bannon.

The president sounded optimistic that a tax bill will be passed within days. But when it comes to getting his agenda through Congress, his predictions have been wrong before.

Let's go to our congressional correspondent, Sunlen Serfaty

Sunlen, does the president have the votes to get this tax deal passed?

SUNLEN SERFATY, CNN NATIONAL CORRESPONDENT: Not yet, Wolf.

But Republicans tonight are increasingly optimistic they will be able to get there. A big sign of progress today came when House and Senate negotiators agreed to a tentative deal on principle to merge their two bills into one.

That is a big step which essentially puts the ball in play, puts the wheels in motion pushing towards a potential final vote up here on Capitol Hill potentially and likely next week. But, notably, it's still only a deal in principle among the negotiators.

There are still many issues to work through here. And notably there are still a significant number of wild cards up here. Senator Bob Corker of Tennessee today on Capitol Hill saying, look, I still have the same concerns that I have always had with this bill -- Wolf.

BLITZER: Sunlen, what's the mood on Capitol Hill right now, especially among the Republicans, after Doug Jones' win last night in Alabama?

SERFATY: Among some Republicans, Wolf, certainly they are breathing a sigh of relief tonight, at least that they essentially don't have to deal with Roy Moore, who could have become a big problem for them in the Republican Party, potentially dealing with a lengthy investigation, potentially dealing with expulsion proceedings.

But Republicans are also at the same time facing this reality that they are now one seat short, one seat less in their majority. And that makes a difference in the math pushing forward on their legislative agenda. But, Wolf, Democrats tonight feeling emboldened, not only they feel that they have gained some leverage up here on Capitol Hill with Doug Jones' win, but it also gives them some ray of hope next year looking ahead to midterms.

BLITZER: Sunlen Serfaty up on Capitol Hill, thanks very much.

Let's get some more on all of this. Senator Joe Manchin is joining us.

He's a Democrat on the Senate Intelligence Committee.

Senator, thanks very much for coming in.

SEN. JOE MANCHIN (D), WEST VIRGINIA: Good to be with you.

BLITZER: All right, we have got a lot to discuss. I want to get to the Russia investigation.

But what's your reaction to Doug Jones win in Alabama last night, the Democrat?

MANCHIN: Well, I just think it speaks volumes for what we call the radical middle, those of still in the moderate middle, centrist Democrats.

And for Doug to come up, coming from Alabama is going to be a big plus working that middle. But I just told Doug, be an Alabama Democrat. You don't have to be a Washington Democrat. Whatever you do, make sure Alabama's first and foremost on your mind. If you can go home and explain it, then you can go home and vote for it.

And if you can go home and explain it and tell them what it's about, no matter whether it's a Democrat idea or Richard Shelby, your co- worker, has a good idea, if it's a Republican idea that works good for Alabama, do it. And that's what Doug has to do.

BLITZER: First time a Democrat has been elected to the Senate from Alabama in 25 years.

MANCHIN: Long time.

BLITZER: Is there anything that the Democrats -- and you're a Democrat -- can do to stop the Republicans from pushing through their tax bill maybe next week?

MANCHIN: Only hope we have right now is some of the Republicans will look at the final version and say, this is not America.

Wolf, there was 15 of us -- I can assure you -- 15 Democrats that wanted to be part of this. I'm the easiest pick up they would have had, but it was designed not to have any Democrats.

If you had a D by your name, they didn't want to -- they did everything they could to keep me out.

BLITZER: Chuck Schumer is asking the Republicans to delay the vote until Doug Jones can at least be sworn in, in early January.

MANCHIN: Well, they're not going to do it because Chuck Schumer asking because of Doug Jones coming.

What they should be doing is saying, what's the rush, what's the hurry? We don't have a crisis on our hand. The market is stronger than ever. We don't have double-digit unemployment. It's lower, at 4 percent, than ever.

What's the hurry? Why can't We do what Ronald Reagan did? He worked it for two years. But why can't we work a good bill that is compromising? And Ronald Reagan, who we all love, got 73 votes out of the Senate.

[18:10:03]

BLITZER: A lot of people are concerned -- and I know you're among them -- about the -- what's called the Children Health Insurance Program, or CHIP.

MANCHIN: Yes.

BLITZER: It was a key issue for Doug Jones in Alabama. Federal funding for the program ran out September 30. Millions of kids receive their health coverage according because they have CHIP.

MANCHIN: Nine million children.

BLITZER: Nine million.

MANCHIN: Nine million.

BLITZER: And I think about 21,000 in your state of West Virginia.

Do you think this victory by Doug Jones will help push the initiative to get this program funded up on Capitol Hill?

MANCHIN: I will put this in perspective.

If you have a tax bill, which we don't have a crisis, an emergency, but we're pushing through like it's a crisis or an emergency, if we have that on the hot ticket right now, and they're moving that through, which is the Republican leadership, you have children, nine million children.

I have 21,000 in West Virginia by February that will lose it. I have 50,000 overall who depend on it. It's the only health care they get. And that is not a priority?

That is truly a crisis there. Why can't you at least put it on the same parity as you think that health -- that the tax reform is needed? It's just ridiculous.

We're begging them, please allow us to put this on. When your omnibus bill comes, during pay-go, whenever, let us make sure that children are taken care of.

BLITZER: Yes, they have got until February to do it. But there's an urgent need...

MANCHIN: Well, some states are falling off now.

BLITZER: ... right away, so that there's an urgent need.

MANCHIN: My state falls off in February.

BLITZER: In West Virginia, February 28. So you got to get it funded before that.

Stand by. We're getting more breaking news on what's going on in your committee, the Senate Intelligence Committee, on the Russia investigation. Donald Trump Jr. appearing there once again today for hours. We will update our viewers on that and more when we come back.

(COMMERCIAL BREAK)

[18:16:18]

BLITZER: We're back with Senate Intelligence Committee member Joe Manchin.

We're following the breaking news on the Russia investigation.

Senator, I want you to stand by.

I quickly want to go to senior congressional correspondent, Manu Raju. He's up on Capitol Hill.

Manu, Donald Trump Jr. back on Capitol Hill, where you are today. What are you learning?

MANU RAJU, CNN SENIOR POLITICAL CORRESPONDENT: Well, he's been behind closed doors with the Senate Intelligence Committee staff since roughly 10:00 a.m., more than eight hours right now, answering a range of questions about his contacts that occurred during the campaign with the Russians, of course, that June 2016 meeting in which he was promised dirt from the Russians on the Clinton campaign.

Now, I just had a chance to speak with Senator Mark Warner, who is the top Democrat on the Senate Intelligence Committee. And he told that this is not going to be the only time that he wants Donald Trump Jr. to come back. He said this, Wolf: "I still have questions. When we're talking about principals, the members are going to want to hear from him directly."

Now, the top Republican on the committee, Richard Burr, has not gone that far. I asked him about that earlier. He would not comment if he wanted Donald Trump Jr. back.

But one question, Wolf, is that when he talked to the Senate -- House Intelligence Committee last week, Donald Trump Jr. invoked attorney- client privilege over his conversations with his father after the initial stories broke about the Trump Tower meeting.

Now, the question is, did he invoke attorney-client privilege today? We don't have that answer yet. And when I posed the question to Mark Warner just moments ago, he would not comment about that issue either. Perhaps one reason why this staff interview still ongoing behind closed doors. We're told, Wolf, it could go for about another hour or so, Wolf.

BLITZER: Wow. They started, as you say, at 10:00 this morning. It's been going on for hours and hours. Manu, thank you very much.

Now to the special counsel's Russia investigation and allegations of political bias within Robert Mueller's team.

Let's bring in our justice correspondent, Jessica Schneider.

Jessica, the man who appointed Mueller faced a lot of questions up on Capitol Hill today.

JESSICA SCHNEIDER, CNN CORRESPONDENT: He did, Wolf.

Deputy Attorney General Rod Rosenstein, he faced hours of grilling and criticism about the special counsel's probe from Republicans. But Rosenstein was unwavering in his support of Robert Mueller and his team throughout that contentious hearing.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): President Trump's Deputy Attorney General Rod Rosenstein found himself taking incoming fire from members of the president's party today defending the Russia investigation and special counsel Robert Mueller, who he appointed, from Republican charges of bias.

ROD ROSENSTEIN, U.S. DEPUTY ATTORNEY GENERAL: I think it would be very difficult, Congressman, for anybody to find somebody better qualified for this job. Director Mueller has throughout his lifetime been a dedicated and respected and heroic public servant. I believe he was an ideal choice for this task.

REP. JIM JORDAN (R), OHIO: This is unbelievable, and I'm here to tell you, Mr. Rosenstein, I think the public trust in this whole thing is gone.

SCHNEIDER: Under relentless questioning by members of the House Judiciary Committee, Rosenstein repeatedly said he sees no reason to remove Mueller.

REP. JERROLD NADLER (D), NEW YORK: Have you seen good cause to fire special counsel Mueller?

ROSENSTEIN: No.

SCHNEIDER: And he suggested to Democrats on the committee that the president has not pressured him to do so either.

ROSENSTEIN: I am not going to be discussing my communications with the president. But I can tell you that nobody has communicated to me a desire to remove Robert Mueller.

REP. HANK JOHNSON (D), GEORGIA: Are you afraid of President Trump firing you?

ROSENSTEIN: No, I'm not, Congressman.

SCHNEIDER: Rosenstein also dismissed any idea President Trump asked him to pledge his loyalty, something former FBI Director James Comey suggested Trump had wanted from him.

REP. HAKEEM JEFFRIES (D), NEW YORK: Is it ever appropriate for the president of the United States to demand a Department of Justice official or FBI director take a loyalty pledge?

ROSENSTEIN: I don't have an opinion about that. Congressman, nobody has asked me to take a loyalty pledge, other than the oath of office.

SCHNEIDER: Rosenstein's staunch defense of the special counsel came as Republicans accuse Mueller's team of being influenced by politics, suggesting the special counsel had hired partisans looking to take down President Trump.

[18:20:05]

Congressmen Steve Chabot ticked through a list of contributions he says some members of Mueller's team have made to Democrats over multiple election cycles, declaring it as evidence of bias.

REP. STEVE CHABOT (R), OHIO: How with a straight face can you say that this group are Democrat partisans are unbiased and will give President Trump a fair shake?

SCHNEIDER: And Republican members pointed to newly disclosed anti- Trump text messages between two employees at the FBI, agent Peter Strzok, who helped lead the Clinton e-mail server investigation, and FBI lawyer Lisa Page. The two exchanged hundreds of texts throughout the presidential campaign in 2016, when they were allegedly having an affair.

Page texting in March 2016: "God, Trump is loathsome human."

Strzok responded, "Yet he may win."

Another exchange said: "Oh, my God, he's an idiot. He's awful."

Strzok had been assigned to Mueller's investigation, but was removed by Mueller this summer when he learned about the text. Rosenstein stressed the inspector general is now investigating those messages, along with the handling of the Clinton e-mail server investigation, pushing back on Republican calls to immediately appoint a second special counsel.

ROSENSTEIN: If we believed there was a basis for an investigation or a special counsel, I can assure you that we would act.

SCHNEIDER: Under questioning by Democrats, Rosenstein pointed out that Mueller was appointed FBI director by both Republican and Democratic presidents and confirmed unanimously by the Senate, saying that political affiliations or opinions are different than bias.

ROSENSTEIN: We recognize we have employees with political opinions. And it's our responsibility to make sure those opinions do not influence their actions. And so I believe Director Mueller understands that and that he is running that office appropriately, recognizing that people have political views, but ensuring that those views are not in any a factor in how they conduct themselves in office.

(END VIDEOTAPE)

SCHNEIDER: But Rosenstein's defense did not placate Republicans.

And now the number two Republican in the Senate, John Cornyn, he is calling for special counsel Robert Mueller to clean house of people on his team who have been politically active or have made comments critical of the president -- Wolf.

Let's get back to Senator Joe Manchin. He's a member of the Intelligence Committee.

Do you agree with Senator Mark Warner, the top Democrat on your committee, that Donald Trump Jr. should come back and testify before the members themselves, like you, as opposed to strictly staffers, which he's been doing for hours today?

MANCHIN: I sure do. I really do.

I believe that basically we owe that. The people that we represent, the people of the United States of America, have to have transparency. That comes from us and through us. I would like to see a public hearing, where the public can before, so the public can understand...

BLITZER: Well, why is he just answering questions from staff members of the committee and no members like you are even allowed to listen in?

(CROSSTALK)

MANCHIN: I don't agree with that process at all. They know how hard and strongly I feel against that.

But I do understand their method. Their method is, they're going through just reams and reams and reams of different probes and investigations. They're looking at everything.

They put together a pertinent set of a direction they want to go in questioning. They bring that. And tomorrow we will be able to see the transcripts from this, questions that were asked.

BLITZER: You will be, the members. The public won't be able to see it.

MANCHIN: Members will be able. The public will not be able to at that time.

We have got to push at this time then as members to have a public hearing so the people can see and hear what we know.

BLITZER: You heard Manu Raju report the meeting started this morning at 10:00 a.m. It's still going on even as we speak right now. We don't know if he once again is invoking the attorney-client

privilege to prevent any discussion of his private conversations with his father. What do you make of that argument?

MANCHIN: Wolf, I would think that if he's invoking his privileges, as he's done before with the House, that we wouldn't be here all this time, it wouldn't take that long, because our side, the staff, would have run out of questions.

You can't just linger a question on that long. So, there has to be dialogue both. So I'm anxious to see tomorrow the transcripts.

BLITZER: We have had several major developments over these past few weeks in the Russia investigation, including arrests and plea bargains and all of that kind of stuff.

I keep asking you question. Let me get your thoughts today. Have you seen evidence of collusion between the Trump campaign and Russians?

MANCHIN: I haven't seen direct evidence of collusion.

That's what the transcripts will show us if there is someone -- you're saying quid pro quo. Did you do something because you expected something in return? I have not seen that.

Do we know that they were involved? Absolutely. Do we know now they have been talking when they said they weren't with different members of the president's team? We know that's happened. So you wouldn't have...

BLITZER: You see evidence of indirect, indirect collusion, let's say?

MANCHIN: Well, when you look at maybe Manafort, OK, let's see where Paul Manafort has gone with this.

BLITZER: The former campaign chairman.

[18:25:01]

MANCHIN: Right, and did he do it for financial gains?

Michael Flynn.

BLITZER: The former national security adviser.

MANCHIN: Absolutely.

So, when you start looking at that, and those people were in the inner circles. Those were people were in decision-making. And they were basically, it looks to me, as if using their position for gains for themselves.

BLITZER: Let's talk about the anti-Trump messages, texts that were sent by this FBI agent who's since been removed from the Mueller investigation.

Do those tweets show that there has been an anti-Trump bias in this whole special counsel investigation?

We find, finally, it has been revealed yesterday that he over the years has contributed to the Republican candidates, up to $39,000 over the period of time. I don't know if that's factual or not. That's what's been reported. And no one has disputed that.

So, here he has leaning that direction. My goodness, I don't think there's anybody more qualified than him to be where he is in the FBI. There's not a better person than Robert Mueller to be in a position he's in, working for both presidents as far as Democrats and Republicans, being overwhelming, unanimously confirmed.

And then he was asked to stay on. He was asked to stay on after the Bush administration to stay on with President Obama.

So, I mean, he's beyond reproach. And for him to get rid of the people he got rid of as soon as he knew shows you the quality of character he has.

BLITZER: So what's your reaction to all these Republicans now saying there should be a second special counsel appointed to investigate all of this, including Mueller?

MANCHIN: This is what makes America sick. This is really what makes America sick with Washington and sick with all of us up here, thinking that we can't get out of our own way politically to do the right thing.

When you have a good man like Robert Mueller, there's not a better person suited to do the job, they have all agreed in the past.

BLITZER: But you have seen the attacks that have been launched.

MANCHIN: I see the attacks. They won't let up.

BLITZER: Is he safe in his job, do you think?

MANCHIN: I would hope to think he's safe. If he's not, then pardon the expression, all hell will break loose.

BLITZER: What does that mean?

MANCHIN: That means that I think there will be an uprising from members of both parties, knowing this is a good man. And you're taking a good man out, you must be taking him out for political reasons, not for the law or the letter of the law, as we -- we're a rule of law. That's how we rule each other and we live by that.

And this is a man that will enforce it. BLITZER: Senator Manchin, thanks, as usual, for joining us.

MANCHIN: Thank you. Thank you, Wolf.

BLITZER: Appreciate it very much.

Just ahead: the Alabama blame game. As Republicans point fingers, will their humiliating loss in Alabama change the president or his party?

And we will have more on the breaking news on Donald Trump Jr.'s latest Russia interview and why a key Senate Democrat isn't satisfied.

(COMMERCIAL BREAK)

BLITZER: More now on the breaking news we're following tonight. Donald Trump Jr. answering questions for the Russia investigation in a marathon session with the Senate Intelligence Committee staff.

[18:31:42] And Bianna, let me start with you. The top Democrat on the Senate Intelligence Committee, Mark Warner, we just heard from Senator Manchin. They both want him to come back and answer questions not just from the staff but from members themselves. What does that tell you?

BIANNA GOLODRYGA, CNN CONTRIBUTOR: Well, look, as you've been talking about earlier with the senator and with Manio (ph), I mean, he's in there for eight hours. So one has to wonder what is being discussed in these eight hours and how forthcoming has he been?

At least publicly, a lot of the information we've learned not from Don Trump Jr. but, of course from reporting and from "The New York Times" and "The Washington Post" and what have you. And it all obviously goes back to that June meeting at Trump Tower with the Russian lawyer.

And every day, it seemed, a new story would come out. He would follow up with his version of it, and yet it was sort of a piecemeal reaction. And I think there's a lot of question as to how forthcoming he's been.

Also remember that this panel has interviewed others within the Trump orbit, as well. So I'm sure they're comparing what they've been told, what Don Junior has said.

BLITZER: The staff members of the committee, they can interview Donald Trump, Jr. Tomorrow the members of -- the Republican and Democratic members of the committee, they can actually read the transcript.

RON BROWNSTEIN, CNN SENIOR POLITICAL ANALYST: You know, the Senate Intelligence Committee has seemed to be the last place that has not yet splintered along party lines in this investigation. I mean, the House Intelligence Committee process is kind of a shambles of partisan conflict. The Senate Judiciary Committee has also been, you know, historically, a less partisan place, has been splintering, as well, between Senator Feinstein and Senator Grassley. The Intelligence Committee has seemed to be the island. But the idea

that the senators themselves would not have access to someone as central to the story as Donald Trump Jr. seems to me unsustainable on a long-term basis and is probably going to be the basis of tension if not resolved.

BLITZER: Abby, how do you see it?

ABBY PHILLIP, CNN WHITE HOUSE CORRESPONDENT: Yes, I mean, I think to be fair, sometimes staff has the knowledge base that's a little bit deeper than their bosses, because they're there studying the material.

But I think one of the things about Don Jr. is -- two things, actually. In the campaign, family was so central to the campaign. He had a lot of power and a lot of leeway, which was very unusual for political campaigns.

And secondarily, this meeting that is of great interest to investigators dealt with a person who was a contact of Don Junior's through the Trump business. So there' are a lot of nexuses of inquiry that probably requires more time and more probing.

BLITZER: You know, Abby, there's a lot of criticism now. You heard the testimony from the Deputy Attorney General Rod Rosenstein defending the Special Counsel Robert Mueller. Especially in light of these e-mail, these texts that have been discovered from now a former FBI agent, still an FBI agent but someone who was demoted doing all these anti-Trump tweets, raising questions about the credibility of the investigation.

REBECCA BERG, CNN POLITICAL ANALYST: Right, and it really was an aggressive defense of Mueller and of the FBI in general.

You know, the -- the question of bias was raised in this hearing. And the response from Rosenstein was that, you know, just because you have a partisan preference doesn't mean you're necessarily biased. And so that's going to be a key distinction in looking at some of these text messages.

But also he defended Mueller as the perfect choice as special counsel, really puncturing the Republican narrative that has been trying to build that Mueller is just a partisan hack on a witch-hunt.

[18:35:19] BROWNSTEIN: You know, I think we're hearing for a big Republican split over this, because the dominant view in the party has been -- I still think the majority view is that -- especially given everything else that's going on that we've seen in New Jersey, and Virginia, and Alabama, for Donald Trump to fire Robert Mueller before the mid-terms election would be the ingredients for a catastrophe.

On the other hand, you have this -- this drum beat that we're talking about, Rec (ph) is talking about. It's getting louder from FOX and talk radio. And now joined by a number of House Republicans, basically saying, "This is -- this is an unfair investigation. It's an existential threat. You have to get rid of it." I think that's going to come to a head. Whether they realize it or not, they're giving the president more space to consider something that most Republicans still believe would be catastrophic to the party.

PHILLIP: It seems like perhaps the way out for some Republicans is this idea of a counter special counsel to investigate some of these other claims. And honestly, it seems like that is about giving the president something to hold onto that is different from firing Mueller.

BLITZER: You know, and Bianna, the anti-Trump texts certainly are -- is giving some ammunition to the president himself, who's been very critical of the FBI.

GOLODRYGA: Though even Rosenstein today said that Mueller, his actions, fell in line with the protocol. He had that investigator moved over to the H.R. department. The female that he'd been texting with is no longer working there. So the protocols were in place to discipline these two individuals over the texts.

And when it comes down to texts and leaking, especially in terms of the FBI, I remember before the election, there had been a lot of concern about FBI agents being anti-Hillary Clinton. There had been reports that Rudy Giuliani had been given information from FBI contacts here in New York and that Jim Comey, the FBI director at the time, was looking into that, as well.

So this goes back to your earlier conversation with the panel that different people, different members of the FBI have their own opinions. And so you're going to have one camp that maybe personally supported Hillary Clinton, the other camp that personally supported Donald Trump. And I think you saw Rosenstein said today they're entitled to that as long as they stick to their jobs during the day.

BLITZER: Yes, and Rosenstein also made clear he doesn't see any need for a second special counsel right now. There's enough special -- enough investigations going on.

All right. There's more breaking news. Everybody stand by. It's being called devastating, an earthquake for President Trump. What does Roy Moore's loss in the Alabama special Senate election mean for next year's midterms?

(COMMERCIAL BREAK)

[18:42:37] BLITZER: We're following the breaking news, including a congratulatory -- congratulatory phone call by President Trump to the Democrat who defeated Roy Moore in Alabama special election. The senator-elect, Doug Jones, says the president was gracious and invited him to the White House, despite what's widely seen as a very damaging loss for the president, who bucked many fellow Republicans by backing Moore.

And Ron, I want to play for you some clips: Republicans reacting to the Alabama Senate results last night. Listen.

(BEGIN VIDEO CLIP)

SEN. BOB CORKER (R), TENNESSEE: I'm really, really happy with what happened for all of us.

SEN. CORY GARDNER (R), COLORADO: I think President Trump had it right. Steve Bannon did not have it right.

SEN. JOHNNY ISAKSON (R), GEORGIA: Roy Moore lost because of who Roy Moore was in this campaign, not because who was president of the United States.

SEN. JOHN CORNYN (R), TEXAS: The most important factor in any election is the quality of the candidates. And I think clearly, we had a flawed candidate.

(END VIDEO CLIP)

Blitzer: So how much does this say, this setback? The president was all in, for Roy Moore? What does this say about the president's clout?

BROWNSTEIN: Look, Roy Moore was a uniquely flawed and vulnerable candidate. But I think the big message out of Alabama is, contrary to what those senators are saying, is every Republican, whether they like it or not, is on the ballot with President Trump.

If you look at what happened in Alabama and how Doug Jones won, it was very similar to the coalitions that powered the Democratic victories in New Jersey and Virginia. Three central components: big turnout and huge margins among African-Americans. Very big margins among younger voters, over 60 percent, even in Alabama. And a sharp movement toward the Democrats among white-collar young whites in those, you know, suburban, affluent counties like Madison, Shelby County, the counties with Auburn and University of Alabama.

What do all those groups have in common? They are all groups that are deeply antagonized from Donald Trump, who give him very low approval ratings, high disapproval ratings. And in fact, 93 percent of the voters who said they disproved of Donald Trump voted for Doug Jones. Eighty-seven percent in Virginia, 82 percent in New Jersey. That is the reality they are facing in 2018, whether they like it or not.

BLITZER: You know, and African-American -- the African-American vote was huge in Alabama yesterday. Twenty-nine percent of the vote. Ninety-eight percent of black women who voted, voted for Doug Jones.

PHILLIP: Yes, I mean black women really showing up for the Democratic Party.

I think there are two things for Democrats here in this race. In addition to everything that Ron just said, the idea that the Democratic base is energized and engaged, and they really turned everything on. All the cylinders were on for this race, and they were able to get minority voters out even if some of those same minority voters thought that Doug Jones maybe hadn't really come out for their vote as much as they would liked him to. They voted against Trump by and large and against a candidate that they believe would hurt them. And secondarily, I think Democrats are learning that there might be a path in the South, especially in the parts of the South where there are a lot of minority voters, a lot of African-American voters in some of these southern states that could really have electoral power in targeted races if the energy is there, if there's an effort put behind it.

WOLF BLITZER, CNN HOST: First time in 25 years that a Democratic has been elected to the U.S. Senate in Alabama.

RON BROWNSTEIN, CNN SENIOR POLITICAL ANALYST: Trump won by 590,000 votes a year ago.

BLITZER: Yes.

BROWNSTEIN: OK, and that is an enormous -- and to your point, Abby, Moore's margins were very big in these rural areas. He did not get the turnout that the Democrats got. And here's the reality. Blue collar white turnout does fall in off-year elections and the Republican Party and Donald Trump is increasingly dependent on those voters.

BLITZER: You know, Bianna, the Republican leadership in the Senate, they really want to vote on this tax bill before Doug Jones is sworn in as the U.S. senator. They have a 52-48 margin right now. In January, once he's sworn in, it will be 51-49.

BIANNA GOLODRYGA, CNN CONTRIBUTOR: Yes, well, if the president could get it on his desk tonight, it would be on his desk. I mean, I think this raises a lot of question about which of his priorities if any can be implemented and can be voted in next year. You've got a one-vote majority compare today a two-vote majority. Look at what it will accomplish this year, tax reform something the president is hoping for is the one big thing that he's going to be able to get done this year.

He had a variety of other things issues he wanted to address, from infrastructure, from entitlement reform, I think it's going to be that much harder because you're giving a lot more weight now to those independent Republicans, the call-ins, the McCains who don't always vote inline with the party. You've got one vote down from two in a majority that didn't get the president very much this year. He's hoping for one win. But, of course, this is a hard one to swallow for the administration going into next year.

BLITZER: He certainly is.

So, what does it mean, Rebecca, for Steve Bannon's war on the Republican establishment?

REBECCA BERG, CNN POLITICAL REPORTER: It's a setback, Wolf. It's a big setback because he was hoping to send a message to McConnell, to Washington Republicans that he could win against them, against their money, against all their publicity, and he fell short this time.

But his network, they all viewed it as just a setback, one battle lost in a larger war. And one person close to Bannon told me that the war inside the Republican Party is only going to get more vicious and blood yr. So they are expecting bigger battles to come in 2018. And there are some key Senate race races where there are going to be messy primaries between Bannon-endorsed candidates and either incumbents or other Republicans.

BROWNSTEIN: You know, Alabama really races the question whether success for Bannon ultimately means failure, in the sense of what you saw in Alabama, as in Virginia, as in New Jersey, is under Trump, what Bannon wants to accelerate is Republicans are trading constituencies that are declining as a share of the electorate for constituencies that are growing. I mean, they are very strong, with blue collar evangelical, rural and older whites.

Those are declining groups broadly speaking, and they are facing in return a significant backlash among younger voters, diverse voters, urban voters and white collar voters, all of them are growing as a share of electorate.

[18:53:33] BLITZER: Breaking news tonight, U.S. defense officials are telling CNN that the Trump administration is expected to present evidence tomorrow showing that Iran is providing missiles to Houthi rebels in Yemen, similar to the ones recently fired into Saudi Arabia. As the Iranian and Saudi proxy war rages on in Yemen, the suffering of civilians caught between the warring fractions is growing.

Our senior international correspondent Clarissa Ward, she's now in London, but she has an exclusive report on her visit. You just returned, Clarissa, from Yemen. Tell our viewers what you saw.

CLARISSA WARD, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, Wolf, I should start out by saying that it took our team more than six months to get into Yemen. That's because there has been a de facto ban by the Saudi Arabia-led coalition on all Western journalists getting into the country and when you get there, you can see why. It is a country that has been torn in two with a health care system and a state that is on the brink of collapse.

Take a look.

(BEGIN VIDEOTAPE)

WARD (voice-over): Yemen is unraveling. In the North, air strikes pound Iran-backed rebel stronghold. Among their recent targets: the presidential palace in the capital Sana'a.

In the south, the streets are run by a patchwork of militias, though it's unclear who is actually in control. Some are loyal to their sponsors in Saudi Arabia and the Gulf. Others to extremist groups, all vying for control of Aidan's port and precious oil resources.

[18:55:08] (on camera): Life here is dangerous and chaotic, but surprisingly, it's not the bombs and the bullets that are killing the most people.

It's the humanitarian crisis that is growing by the day as Yemen edges closer to becoming a failed state.

The hospital is in desperate need of everything from ventilators to basic antibiotics.

UNIDENTIFIED FEMALE: This is more serious condition.

WARD: Dr. Nahala Arisi (ph) started working here 24 years ago.

UNIDENTIFIED FEMALE: This is the worst situation now, it is aggravated now.

WARD (on camera): Because of the war?

UNIDENTIFIED FEMALE: Because of the war. Yes.

We are trying. Our doctors trying but this is our facilities, this is what is in our hands.

WARD (voice-over): Three-year-old Hadir (ph) has been sick with a serious lung infection for weeks.

(on camera): When did you come to the hospital?

(voice-over): His mother Yamal (ph) only brought him to the hospital three days ago. She says the journey from her village was too far and too expensive.

Life is hard since the war. Disease has spread, she tells me. He's my only child.

Chicago pediatrician John Kahler is here to try to help. A rare visitor from the outside world. On this day, he's visiting the neonatal ward.

There is no soap. Just bottled water.

DR. JOHN KAHLER, CO-FOUNDER, MEDGLOBAL: So, these babies are jaundiced, right? And so they're going to get photo therapy.

WARD: The newborns have to share an incubator, increasing their risk of infection. Doctors and nurses are also in short supply. Leaving mothers to step in and lend a hand.

KAHLER: At this point in time, even if we got more bins here to fill numbers of patients, we don't have the staff.

WARD (on camera): When you look at doctors like Dr. Nahala (ph) who could be overseas, are you impressed? KAHLER: I'm not just impressed. I'm awe inspired by them. This is a

passion that I, the doctors that person in these hospitals, those are the real heroes.

WARD (voice-over): Heroes armed with little more than determination and resilience.

(on camera): What goes through your mind when you see a child die because you don't have the right equipment to care for that child?

UNIDENTIFIED FEMALE: I can't speak as I am a mother. I am a mom. I have three kids. This is what in our hand. This is our facilities. We are daily speaking. But no one heard us.

WARD (voice-over): A cry for help, but for Hadir, it is too late. He dies the day after our visit, another death that could have been prevented in Yemen's forgotten war.

(END VIDEOTAEP)

WARD: And as if, Wolf, the health care system isn't stretched enough, on top of this, Yemen is also grappling the worst cholera outbreak in recorded history. Nearly one million cases recorded. They are starting to get those numbers.

Now, they're seeing resurgence of another disease, diphtheria, again, diseases that people thought were relegated to the history books are making a big comeback in this devastating landscape, Wolf.

BLITZER: Clarissa, what an amazing and heartbreaking report. Is there any expectation that aid will start to get in anytime soon?

WARD: There's no real expectation because there's so little political process, so little political progress, rather, on the diplomatic front and it's important for abuse to understand. This isn't really just a civil war. This is a proxy war. This is about a rift between Iran and Saudi Arabia and as long as the sectarian chasm exists between those two regional superpowers, it is very difficult to see how aid can get in. How those people can get that aid that they so desperately need, Wolf.

BLITZER: And it's obvious and very clear to us that that rift between Saudi Arabia and Iran is not going away anytime soon at all.

Clarissa, thank you so much for the exclusive report. A really powerful report. Excellent reporting for us. Thanks very much for doing that.